When the Borrower Has More Knowledge About the Attributes of an Investment

question 3

Multiple Choice

When the borrower has more knowledge about the attributes of an investment project than the lender, then the lender has a problem of:

• A) adverse selection.
• B) moral hazard.
• C) risk aversion.
• D) systematic risk.

---

Definitions:

Lobbying

The activity of attempting to influence decisions made by officials in the government, often by special interest groups or professional lobbyists.

Action Research Cycle

A reflective process of progressive problem-solving led by individuals working with others in teams, as part of a "community of practice" to improve the way they address issues and solve problems.

Data Gathering

The process of collecting information from various sources for specific purposes, such as analysis, research, or decision-making.

Implementation of Intervention

The process of applying strategies or actions intended to alter or influence a particular outcome or set of conditions.